Commodity Prices- What to expect in 2018?

SEATTLE (Scrap Monster): The copper prices ended the previous year at $7,260 per tonne, the highest level in almost four years. The red metal recorded second consecutive year of increase. When compared with the levels during early-2016, the price of copper has surged higher by almost 70% till the end of 2017. Meantime, zinc prices hit the highest level in almost a decade during end-2017, touching at $3,300 per tonne. The zinc metal prices have more than doubled when compared with early-2016 levels.

In accordance with the data published by the International Copper Study Group (ICSG), world copper mine production has dropped marginally during the first three quarters of 2017. Trade data indicates that imports of copper concentrate by China hit new record of 1.78 million tonnes in November. The full-year imports by the country are expected to surpass the imports of 17 million tonnes recorded in 2016. On the other hand, refined copper imports by the country has registered decline of almost 5% year-on-year to total 4.24 million tonnes during the first eleven months of 2017. The latest research report published by Goldman Sachs states that long term prospects still look good for copper.

The data compiled by the International Lead and Zinc Study Group (ILZSG) suggests that world zinc market ended in a deficit of 401,000 tonnes during Jan-Oct’17. The Chinese zinc imports have surged higher by 43% during Jan-Nov ’17. Goldman Sachs anticipates strong demand growth for zinc during the first half of 2018.

Meantime, Nickel market ended in a deficit of 49,900 tonnes during January to October in 2017. The prices have continued its decline in 2017. According to BMI Research, the refined nickel prices are expected to fall further, mainly on account of supply glut from Indonesia and reduced demand for the metal from China. The Agency forecasts Nickel prices to average at $10,000 per tonne in 2018. The market surplus is expected to widen further, thereby causing further downside pressure on prices, it notes.

BMI foresees marginal jump in global refined nickel production from 1.89 million tonnes in 2017 to 1.92 million tonnes in 2018. The Indonesian refined nickel production is likely to post biggest jump during this year.